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KPN Strikes Tax Deal

Updated Feb. 18, 2004 5:25 p.m. ET

KPN NV wrung some good news from its struggling mobile-phone operations in Germany with a tax deal that will add &euro;1.08 billion ($1.39 billion) to 2003 net profit. The deal allows losses from its mobile operations, most notably a loss at its E-Plus German unit, to be offset by profit from its Dutch fixed-line operations, even though E-Plus's losses were mostly incurred outside the Netherlands. The settlement with Dutch tax authorities means KPN won't pay any Dutch tax on E-Plus until 2006. "We are not extremely happy, but satisfied with the compromise," said Chief Financial Officer Maarten Henderson....